East of Suez Market Update 1 Sep

VLSFO and LSMGO prices in East of Suez ports have risen, while VLSFO availability remains tight in Singapore.

IMAGE: Bunker delivery in Singapore. Getty Images

Changes on the day to 17.00 SGT (09.00 GMT) today:

• VLSFO prices up in Zhoushan ($56/mt), Fujairah ($29/mt) and Singapore ($11/mt)
• LSMGO prices up in Zhoushan ($48/mt), Singapore ($27/mt) and Fujairah ($21/mt)
• HSFO prices up in Fujairah ($12/mt), and down in Singapore ($6/mt) and Zhoushan ($1/mt)

Zhoushan’s VLSFO price has surged by $56/mt over the past day, the sharpest increase among the three major Asian bunker ports. The price rise has erased its discount to Fujairah, bringing prices close to parity, while the premium over Singapore has widened by $45/mt to $55/mt.

Meanwhile, Zhoushan's HSFO price has remained largely stable. The resulting Hi5 spread has widened sharply from $153/mt to $210/mt, surpassing spreads in Fujairah at $202/mt and Singapore at $169/mt.

VLSFO availability remains tight in Zhoushan despite subdued demand, with suppliers advising lead times of around 10 days, up from 7-10 days last week. The supply constraints continue to reflect delivery backlogs following Typhoon Dolphin, compounded by renewed weather-related suspensions of bunkering operations.

Singapore is also facing tight VLSFO availability. Lead times range from around nine days to as long as 16 days, compared with 7-19 days a week earlier.

Brent

The front-month ICE Brent contract has gained by $1.13/bbl on the day, to trade at $92.37/bbl at 17.00 SGT (09.00 GMT) today.

Upward pressure:

US President Donald Trump has once again drawn the market’s attention with his latest hardline comments, putting upward pressure on Brent crude’s price.

The statement came shortly after the US and Iran resumed direct exchange of fire for the first time in recent weeks. 

Trump claimed that Washington is prepared to “smack” Iran, if it continues to target more US assets in the Middle East.

“Oil prices started the week stronger following the first military strikes between the US and Iran in a month,” two analysts from ING Bank noted.

Downward pressure:

While there is limited downward pressure on Brent’s price today, market analysts will have an eye out for the US commercial crude stocks data due later this week.

Commercial US crude oil inventories increased by 95,000 bbls to 429 million bbls in the week ending 21 August, according to data from the US Energy Information Administration (EIA).

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

By Tuhin Roy and Aparupa Mazumder

Please get in touch with comments or additional info to news@engine.online